Is minimum alcohol pricing the answer to binge drinking?
The Prime Minister has announced that England will follow Scotland’s lead and introduce a minimum price per unit of alcohol. That would, it is claimed, protect responsible drinking in pubs but deter the binge-drinkers and the addicted. Unfortunately he has got a bit ahead of himself.
Originally the Scottish government pressured the industry to agree the minimum price, and enforce it, amongst themselves. Despite this being the land of Adam Smith, it took a while for the penny to drop that such price fixing would be illegal. Then it transpired that the Scottish government setting the minimum price would, or might, transgress EU legislation. A visit to Brussels by the Scottish Health Minister last month did not resolve the matter but we should hear from Brussels shortly.
Stepping back a bit, minimum unit pricing, i.e. the price per centilitre of pure alcohol, works as follows. If it was introduced at 40p, then the minimum price of a bottle of wine (9 units) would be £3.60 and a bottle of 70o spirits (units) would be about £10. The products that would be priced up, and possibly out, would be the high alcohol beers and ciders. And, it is claimed, they are the drinks of choice of the binge-drinkers and the addicted, i.e. those who drink for the effect rather than more socially and moderately.
Sheffield University has some sophisticated models which indeed show minimum unit pricing would have relatively more impact on the target “harm” groups, but would also cut total alcohol consumption, and Treasury revenue, possibly due to a ripple upwards effect on other pricing. Of course the anti-alcohol groups applaud. They see reducing total alcohol consumption as the way to reduce alcohol harms. According to them this is statistically proven. Actually the theory goes back to Sully Ledermann 56 years ago and it does not stand up at all. The UK is in the middle of the EU pack in terms of per capita alcohol consumption. It has been falling steadily for some time and faster than the EU as a whole. Yet the UK has more alcohol problems, alcohol related A&E admissions for example, than elsewhere in the EU. If Ledermann was right, how come problems are increasing when consumption is falling?
In Ireland half the populace does not drink at all, leading to a low per capita total, despite the best efforts of their compatriots to make up for it. Per capita averages are misleading.
Another problem is that the number of units does not appear on the packaging. It would be very difficult for retailers to implement minimum pricing if they do not know how many units are in the package. The drinks industry agreed with government, in March 2011, to have the number of units appear on the packaging of 80% (by volume) of alcoholic drinks sold in off-licences by 2013. This, sensibly, lets the very small (by volume) sellers such as Chateau Lafite off the hook.
Apart from one Canadian province, and that is a very different situation, minimum unit pricing has not been tried anywhere in the world. It may turn out to hurt moderate more than "problem" drinkers. What works in Sheffield’s models and what happens in practice are two different things.
The good intentions paving company
By now we should be well on our way to the "Big Society, Small Government" that David Cameron promised us. Now the Coalition is weakening on GDP growth, the idea is to promise us happiness, or at least well-being. Apparently, the government will nudge us towards more wholesome life styles rather than enforcing it through tax and regulation. In December 2010, the Nudge Team in the Cabinet Office published how their insights could be applied to health. The topics covered were: smoking, organ donation, teenage pregnancy, alcohol, diet and weight, diabetes, food hygiene, physical activity, and social care.
So far, so good. Who could argue with improved well-being for us all and it being achieved through our own preferences and behaviour rather than government fiat?
Unfortunately, the programme has both a flaw and a problem. The flaw is the idea that GDP and happiness (i.e. satisfaction with life) are not as independent as the government would have us believe but closely correlated. Look no further than Greece to see the impact of a sharp deterioration on incomes on life satisfaction. In January the IEA published an admirable analysis (“...and the Pursuit of Happiness: Wellbeing and the Role of Government”) showed clearly that GDP led life satisfaction.
It concluded “Happiness economics, which tries to extend a deficient hedonic morality to the arrangements of an open society, must be pronounced an unworkable project.” Well that’s a bit high-flown but it boils down to the need for government to stick to its knitting, and that includes improving GDP, and desist from trying to manipulate our behaviour to match its preferences.
The problem is measurement. A whole new science of indexing happiness is developing. The OECD has a big hand in this as it wishes to measure well-being across countries. Five years ago, an introductory paper on measuring subjective well-being noted four methods for starters: multi-item scales such as the Positive and Negative Affect Schedule and Satisfaction With Life. More recent important measurement approaches include the Experience Sampling Method, Ecological Momentary Assessment and the Day Reconstruction Method. There have been no shortage of proposals since then but the problem has less to do with confusion than dealing with time effects.
For example, an excessive imbiber of alcohol may report high satisfaction with life until his doctor diagnoses cirrhosis. The observer may know that no good will come of his drinking but if subjective well-being is what is measured, then drinking will increase his score on party nights even if the mornings after tell a different story. It is not just a matter of short-term fluctuations but of factoring in the bad consequences from many years later. To account for those, the government statisticians have to, in effect, present value the dire future and subtract it from today’s satisfaction.
In other words, we are no longer measuring subjective well-being as promised but what that subjective well-being would be if we were rational people with perfect knowledge of the government’s forecasts for us and if those forecasts were correct. That is a lot of “ifs” to correct our illusions of our own well-being.
It does not take much manipulation of the figures to provide justification for whatever it is that the Department of Health, for example, wishes to do. It opens the door to more government interference in our lives and choices. They know how to maximise our well-being even if, and especially when, we do not.
So what started out as a benign philosophy, Big Society, Small Government, perversely turns out, and not unusually, to have unintended consequences. The issue is not the means, i.e. whether changing our behaviour is achieved by nudging (behavioural economics) or traditional tax and regulation. The issue is freedom. No one will quarrel with the need for government to tell us what the consequences of our behaviour are likely to be – assuming the science is valid – but we should be allowed to make our own choices.
National happiness cannot be divorced from GDP; if our government wants us to be happy (and vote for them), they should concentrate on GDP.. Manipulating subjective well-being statistics to justify further government interference in our lives will not deceive the electorate.
Echoing Rick Santorum
Tom says he's no Rick Santorum. And thank god for that. In 2006, Santorum said he was against individualism, libertarianism, and much more:
One of the criticisms I make is [of] this whole idea of personal autonomy ... this idea that people should be left alone, be able to do whatever they want to do, government should keep our taxes down and keep our regulations low, that we shouldn’t get involved in the bedroom, we shouldn’t get involved in cultural issues.
I'm certainly glad that Tom's no Rick Santorum. You might think Rick Santorums are rare in the UK. If only:
I don't like choice. No, sorry that was a lie. I hate choice. I detest it. Simplicity is best. . . .
To me, a hospital and a doctor serve a function. Its not complicated. If I get sick I go to my doctor, he gives me a prescription. If I get really sick I phone 999 they take me to a big white building and put me in a bed. Since when did it all get so complicated? I don't want to book a surgeon. I don't want to choose my care, to rate my food, to score my surgeon. This is not X-factor this is my health. I am an historian not a medical genius. I would much prefer it if my doctor or hospital made my choice for me. What scares me the most is that if my entire life experience of consumer choice has been frustration at the rise in prices, why should it be any different in the NHS? Am I crazy? Am I the only person who does not want choice?
That's lefty blogger Eoin Clarke applying the philosophy of Santorumism to healthcare. After reading his whole post at "The Green Benches", including a story about the agony of choice at Starbucks, I wonder if "The Green Ink" might be a better title for his blog instead.
I can't stand the Santorumist view that some jumped-up prig in government should be able to interfere in my private life. Most people in Britain shudder at the thought of Rick Santorum. And so they should. But they should also shudder at his meddling, father-knows-best worldview being applied to the rest of their lives, including their healthcare.
Privacy isn't just a good thing when it comes to sex. Santorum's collectivist delusions about controlling your bedroom are bad, but Clarke's collectivist delusions about controlling your healthcare are hardly any better.
Update: Simon Cooke has more thoughts on choice in bread and cheese, and what that means for healthcare and education.
Plain packaging - a new Adam Smith Institute report
Today sees the launch of the Adam Smith Institute's latest report, Plain packaging: Commercial expression, anti-smoking extremism and the risks of hyper-regulation. Its author, Christopher Snowdon, is the author of books including The Spirit Level Delusion, Velvet Glove, Iron Fist, and The Art of Supression. We reproduce the report's executive summary in this post, but the whole report is available to download for free here:
1. The UK government is considering the policy of ‘plain packaging’ for tobacco products. If such a law is passed, all cigarettes, cigars and smokeless tobacco will be sold in generic packs without branding or trademarks. All packs will be the same size and colour (to be decided by the government) and the only permitted images will be large graphic warnings, such as photos of tumours and corpses. Consumers will be able to distinguish between products only by the brand name, which will appear in a small, standardised font.
2. As plain packaging has yet to be tried anywhere in the world, there is no solid evidence of its efficacy or unintended consequences.
3. Focus groups and opinion polls have repeatedly shown that the public does not believe that plain packaging will stop people smoking. Even ardent antismoking campaigners do not make such a claim. Instead, activists assert that nonsmokers take up the habit as a result of seeing “glitzy” tobacco packaging. This claim lacks plausibility and is bereft of empirical evidence.
4. One in nine cigarettes smoked around the world is counterfeit or smuggled. The illicit market lowers prices, fuels underage consumption, deprives the treasury of tax revenue and makes an unhealthy habit still more hazardous. It is hard to think of a policy that could delight counterfeiters more than standardising the design, shape and colour of cigarette packs.
5. The wholesale confiscation of an industry’s brands and trademarks represents an unprecedented assault on commercial expression. It not only tramples on the principles of a free market, but it may also be illegal. Expert opinion, including that of the European Communities Trade Mark Association, the British Brands Group and the International Trademark Association, says that plain packaging is an infringement of intellectual property rights and a violation of international free trade agreements to which the UK is a signatory.
6. Anti-smoking lobbyists claim that plain packaging will not be imposed on other industries in the future, but this is a hollow reassurance in the light of the accelerating war on alcohol, sugar, salt and fat. What happens to tobacco tends to happen to other products sooner or later. Public health organisations around the world have been applying the blueprint of antitobacco regulation to other products for years. Sin taxes and advertising bans are increasingly common for certain types of food and drink, and various campaigners have called for graphic warnings to be placed on bottles of alcohol. It should be no surprise that in Australia, where a plain packaging law was passed in 2011, activists are already demanding that ‘junk food’ be sold in generic packaging. Australian anti-smoking lobbyists, meanwhile, say that the next step after plain packaging is to force the tobacco industry to make cigarettes “foul-tasting”.
7. Plain packaging is not a health policy is any recognisable sense. It neither informs nor educates. On the contrary, it limits information and restricts choice. It will serve only to inconvenience retailers, stigmatise consumers and encourage counterfeiters. Wholesale expropriation of private property to make way for public propaganda represents an unacceptable intrusion into an already over-regulated marketplace which will set a dangerous precedent for other products.
Tackle the root causes of slavery and human trafficking
On the BBC’s Today programme last Thursday, it was reported that vulnerable individuals from the UK are being trafficked within the EU to work as forced labour. The predictable response was to ask an EU official what the government response to such a problem should be which was outlined as information-sharing, enforcement, inter-governmental co-operation via the European Convention on Action Against Trafficking and so on.
A similar position can be found in this report from the Joseph Rowntree Foundation from 2007, looking at trafficking and slavery into the UK. This report suggests that appropriate policy recommendations should be based around governmental solutions; public awareness campaigns, tougher regulation of gangmasters, a more rigorous enforcement of the 2004 Immigration and Asylum Act provisions against trafficking and so forth.
Unfortunately, most of these proposed actions focus upon symptomatic treatment and do not tackle the underlying causes of human trafficking and slavery. The JRF report recognises that many of the problems are integral to the issue of migration. In terms of the countries of origin, there is little that can reasonably be said without entering into a discussion of development economics (barriers to trade and migration and the stultifying effects of aid are for a different discussion). It is clear, however, that UK immigration policy – by tying visas to specific jobs – enhances the ability of unscrupulous employers to coerce the victims. Tougher enforcement is unlikely to be very effective given its failures thus far; as the JRF observes, there have been very few prosecutions for trafficking. Comparison with the drugs trade would suggest that tougher enforcement merely drives up prices and further enriches the traffickers without having any noticeable impact on supply, amongst other harmful effects.
Eliminating the causes of human trafficking would be far more effective in these circumstances. The JRF report argues that the UK’s labour markets are the most flexible in Europe and it is the demand for cheap seasonal and temporary labour that creates demand for forced labour. Supermarket monopsony forces suppliers to drive down costs and employ the cheapest possible labour. Whilst the UK’s labour market may be more flexible than some, it is still highly inflexible in absolute terms. Temporary labour is favoured because of the bureaucratic costs of employing permanent labourers. Attempts to impose the same costs on temporary labourers will also further encourage a resort to illegal labour unencumbered by regulation. Similarly, the minimum wage creates an incentive to employ bonded labour either to avoid paying such wage rates or because of the reduction in supply of labour that minimum wages and bureaucracy imposes. Further, while it is a complex issue, the supermarket monopsony can hardly be explained in terms of a free market as the supermarkets receive various state-imposed economies of scale and barriers to competition which they would not receive in a free market.
One major aspect of the problem is the sex trade. Unlike the grey area of seasonal labour the sex trade is illegal. This creates the ideal incentives for trafficking and exploitation, and it is one of the strongest arguments for legalisation of prostitution. Instead, in an absurd piece of wrong-headedness, politicians like Harriet Harman advocate exactly the opposite. Sex workers themselves recognise the folly of this argument. It must also be pointed out that a slave is someone denied control over their body – which is what, in effect, prohibition of prostitution is doing. Criminalisation also makes it easier to engage minors in the sex trade as customers have fewer means of ensuring the legitimate nature of the business they are dealing with.
Of course, trafficking is not a simple phenomenon. In the case of forced marriage there is a case for state intervention because the slavery is an end in itself and is not a market-related phenomenon as such. These cases are rather more limited in number, however. It is also typical of interventionism in that it seeks to remedy one unintended consequence of interventionism with another, rather than removing the initial intervention. In other words, the government is enabling and incentivising a negative behaviour that it then seeks to remedy with further investment of resources, but it is amazing when everyone is surprised that such an approach fails. Thus it is liberalisation of labour markets and migration, not further state interventionism, which would mitigate against human trafficking.
The perfectly ordinary case of Ryan Lavery
In Northern Ireland, there is a man named Ryan Lavery, who used to live next to the Ballykinler military installation in County Down. Lavery, whose solicitor describes him as a "trainspotter, an anorak, a nerd with no friends" and who would, if "put beside an airport... take pictures of planes," used to be in the habit of taking photographs of cars entering and leaving the nearby base from his home. From time to time, he would write down a list of registration numbers of cars he observed in this way, and it is on account of this unusual hobby that, last Friday, Mr Lavery found himself standing before a Northern Irish magistrate, deprived -- at least for the moment -- of his liberty.
Information on his case is scant, and media coverage light. What I have been able to glean from open-source media reports is that Mr. Lavery is accused "of collecting information likely to be useful to a person committing or preparing an act of terrorism," namely the photographs, and of "having a document likely to be of use to terrorists", i.e., the list of registration numbers. While my familiarity with the Lavery case goes no further than that which has been reported by the media, I am going to venture a guess that he has been charged under the Terrorism Act 2000, s. 58 - which proscribes "possessing or making a record of information of a kind likely to be useful to a person committing or preparing an act of terrorism, or possessing a document or record containing information of that kind." While it is a defence to this charge for the accused to demonstrate that he had a reasonable excuse for making the images and possessing the list of registration numbers, whether Mr. Lavery's brand of budget, home-bound trainspotting will hold water with a judge is another question entirely. If it does not, the allegedly friendless Mr Lavery has a potentially very serious problem on his hands: the maximum penalty for contravening s. 58 is ten years imprisonment.
It would, of course, be wildly inappropriate to speculate as to Lavery's guilt or innocence at such an early stage, and from such a great distance, physical and factual, as I do from my perch in London. Yes, taking photographs of car number plates is something that someone with sinister intentions might do, but it is no more unusual than trainspotting or planespotting (though as far as hobbies go, I can think of better ones). However, given the legislation currently on the books, we should not find the fact of his arrest unusual in the least.
Even before the September 2001 attacks against the United States, terrorism has presented a vexing problem for liberal democracies: on the one hand, while Western democracies exist largely free of separatist or revolutionary civil conflicts (changing governments through a polling booth is much more straightforward, and allows the majority of the population to do their bit and get home in time for TV Burp or Dancing on Ice), those who really wish to engage in political violence have historically not had a great deal of trouble doing so: wrote Paul Wilkinson in 2000, "The intrinsic freedoms of the democratic society make the tasks of terrorist propaganda, recruitment, organisation and the mounting of operations, a relatively easy matter. There is ease of movement in and out of the country... Rights of free speech and a free media can be used as shields for terrorist defamation of democratic leaders and institutions and terrorist incitement to violence." Of course, when our governments address the threat and are "provoked into introducing emergency powers... (they confront) the paradox of suspending democracy in order to defend it." Unquestionably, Britain was so provoked (in 2005), and liberal democracy was suspended in due course.
Using the excuse that terrorism poses a greater existential threat to the state than other forms of extreme violence (e.g. GBH, youth rioting, or non-political murder), the government enacted legislation to curtail and restrain terrorist activity, all of which is drafted very broadly when viewed through the lens of traditional criminal law. Writing in 2008, Sally Ramage points out that this approach is deliberate: the point of such legislation is to "allow the state to intervene at earlier stages of a criminal enterprise", and, according to Clive Walker, serve as a "platform for investigative police powers where there must be some margin of error." As a result, the British people have been made to endure sweeping new powers of arrest and detention, the criminalisation of many forms of free speech (see the ongoing debate over s. 1(3), and ss. 1-3 generally, of the Terrorism Act 2006), and the banning of information which might be of use to terrorists -- even if it isn't going to be used by terrorists. All of this has created a "climate of panic" where anything that has even the remotest connection to terrorism, whether it be a young girl's poetry, an opera, or a PhD thesis is treated as suspect by the nation's police forces, a broad range of culturally acceptable or benign expression is suppressed through fear of judicial sanction, and "prosecutorial discretion" is more determinative than the express intention of Parliament in deciding what is legal and what is not.*
Practically, this means police arrest far more citizens on suspicion of terrorism than are actually charged with any crime,** and we must keep in mind that this is the climate in which Ryan Lavery has been arrested. For that reason alone, his is a case worth following.
If the charges stick and there is in fact some sinister ulterior motive to Lavery's actions, then the local constabulary deserves a pat on the back and congratulations on a job well done. If, however, it becomes clear that there is nothing to this story and the charges are dropped -- which is my hunch, as I suspect the Co Down constabulary would have been rather more vocal with the press over the weekend if they had uncovered anything resembling a serious plot -- then the state, through the application of a widely criticised and overly broad act of Parliament, will have instantaneously blown apart the very private life of an eccentric, but nonetheless quiet, lonely, and reclusive man in front of the entire world. I can think of nothing more terrifying.
*Writing in 2007, Clive Walker pointed out that, "at the moment, too much depends on prosecutorial discretion as to who is treated as friend or foe. Plots against the Libyan regime of Ghaddafi were possibly encouraged years ago, but now there is rapprochement. Conversely, plots against Syria are openly tolerated." Expressing hopes for the violent overthrow of an Arab government is virtually certain to fall within the meaning of "encouraging terrorism" under s. 1(3) of the Terrorism Act 2006. Yet, while the Ghaddafi regime was still the competent legal authority running Libya, where were the arrests of supportive Tweeters, bloggers and journalists? A law which cannot be consistently applied without utterly crushing freedom of speech is not one which should be in force to begin with.
** ibid. at 331, referencing Hansard, HC Vol. 431, Col. 1621w (March 7, 2005) (Hazel Blears).
Gay marriage is a libertarian issue
Over at the Telegraph, the ASI's JP Floru has an excellent article in defence of gay marriage. He makes the point that what we think of as the "tradition of marriage" — the state- and church-endorsed institution that is currently reserved for heterosexual relationships — is in fact a relatively new phenomenon rooted in modern codifications of common law practices. Per Hayek, this creation of state-created legislation instead of case-based, court-created law has had desultory effects in all sorts of spheres of life, by replacing the bottom-up with the top-down. JP argues:
Before the first ever Marriage Act (1753) established common procedures to enter into a legal marriage, there was a wide range of ceremonies and customs by which people thought of themselves as being married...
With the Marriage Act 1753 state and church came together to decide what was marriage, and what wasn’t. From then on, a mere agreement would never be sufficient anymore to give all the legal consequences of a marriage as defined by statute. The heavy hand of government closed the door to the endless variety of unions which existed before, to be recognised as a valid marriage.
You don't have to believe that same-sex marriages existed in pre-modern times (though some academics do) to see their emergence now as a part of a healthy institution of marriage; what is necessary is for people to have the freedom to adapt. JP's point about the patchwork quilt of practices that existed before marriage's codification is important — once the state gets involved with the messiness of life, it tends to impose its own kind of order on things without much care for why things were messy in the first place. Fundamentally, JP says the state should get out of marriage (as it should get out of every other aspect of our private lives). But, failing that, there is an overwhelming case for it to extend marriage rights to same-sex couples to allow them to live their lives with dignity and the same privileges that heterosexual married couples currently enjoy.
Some libertarians argue that this is the wrong position to take: they say that arguing for same-sex marriage within state boundaries amounts to "extending state privilege" and is not a form of justice. JP is not writing for this narrow group, so he doesn't discuss this, but I think he would agree with Steve Horwitz, who compares the injustice of many US states' current marriage laws to the injustice of a social security system that withheld benefits from black people. It is in the interests of liberty for the state to be as indiscriminate as possible even where it is acting unjustly; so, for instance, while a state social security system may be an unjust infringement upon our liberty, one that excluded black people would be even worse.
It's great to see articles like JP's in media outlets like the Telegraph. I have a feeling that the fight will be won in the next few years, despite resistance from some sections. After that, the next push has to be for true freedom for everybody: for the state to get out of marriage altogether.
Why I hate being a libertarian
For as long as I can remember I have believed that decisions should be made at the lowest level possible. When I was younger, I used this thinking to justify the existence of supranational organisations such as the EU and a whole host of government regulations that to my older, but still young, eyes now seem to be ridiculous. Many of my conclusions have changed over the last fifteen years but my core ideology remains the same. It's just that now I see that the lowest level possible is often the individual.
Voltaire is often misquoted as having said, “I disapprove of what you say, but I will defend to the death your right to say it.” I often find it odd the way this quotation is used. Should it not be followed with “and if you're a sexist, racist or homophobic I will use the same right to follow you around and ridicule you at every opportunity”? I have come to take a broadly similar attitude to actions, at least those which do not involve the use of either force or deception, though I probably would not go quite
a far as Voltaire in defending them to the death. Unfortunately one of the logical conclusions of my ideology is that when one sees injustice which involves neither force nor deception, I can't utter phrases such as “someone should put them away” or “there should be a law against that.” This is why I hate being a libertarian.
Yesterday there was quite a twitter storm over a user who goes by the alias @badlydrawnroy. His twitter feed describes how he has been feeling depressed of late and after taking some advice from the twittersphere decided to tell his employers about his predicament. Unfortunately it transpires that his employer is about as unenlightened as the mouldy cheese inside my fridge when the door is closed, and her response appears to have been to summarily dismiss him for being ill.
There is no denying that if, as I would prefer, employers did not pay your sick leave, maternity leave and holidays to you when they became due but instead put money into an account which was entirely under the employees control for the expected cost, this would be much less of an issue. Particularly since this would lead to a situation where employers would be paying all employees for their actual work done and insurance companies and private providers would be the ones taking all the risks. However, the fact remains that an employer has decided to sack a man for having depression. While in an ideal world I wouldn't want the government to intervene, I do disapprove.
The worst thing, in my opinion, is that this is exactly the reason why our country is so completely drowned in red tape. It's because when many people hear stories like this they get angry and demand that 'something must be done'. Politicians who like to be seen to be doing something then cobble together some atrociously-worded legislation which increases the burden on small businesses making themless inclined to be flexible and continuing the drowning spiral.
Therefore I find myself wanting to cry out that 'something must be done' and hating that, as I am a libertarian, it would make me a hypocrite. Then I recall that there is an option open to me. I can choose to boycott this company and use my free speech to encourage others to do so also. Therefore, if you agree with me that sacking a person for being ill, without having first tried to make the situation work either by offering them the option to go part time, with a proportionate cut in pay, or at the very least statutory sick pay (which would cost an employer little), is totally unacceptable, then I encourage you to boycott this company until either it reinstate Roy or goes bust. Of course, if you don't agree with me you're free to continue purchasing their goods and services. That's the voluntary way.
Campus smoking bans are naked authoritarianism
When a Guardian journalist attended an Adam Smith Institute event in October, he came away convinced that libertarians are “obsessed” with smoking. This, of course, is an outrageous slur (everybody knows libertarians are obsessed with guns and drugs), but how can freedom-minded individuals not take an interest in the naked authoritarianism of the anti-smoking lobby in 2012? Take events on US college campuses, for example:
Looking for the designated smoking area at Florida International University? There is none.
Want to light a cigarette inside your car at the University of Florida? Don’t let let the cops see you.
Hoping to smoke during your break at Nova Southeastern University? You have six months left until NSU becomes the latest college to go tobacco-free. Come July 1, the covered smoking benches will come down and smoke-free-campus signs will go up.
This is part of a growing trend towards ‘smokefree’ campuses, of which there are more than 600 in the Land of the Free. And by smokefree they mean no smoking anywhere inside or outside: not in the grounds, not on the pavement, not in the fields, not even in your own car.
But isn’t a car, y’know, private property? Nova Southeastern University’s ‘director of campus recreation’ has an answer for that:
"We don't want your car to be a safe haven, where you do any activity you want as long as you're in your car."
Heaven forbid there should a safe haven, especially for legal activities...
Meanwhile, Californians have done what Californians always do and taken the lunacy a step further. The University of California, San Francisco has not only banned smoking across its entire grounds and student digs, but also banned students and staff from carrying any form of tobacco. Taking the paternalism to absurd lengths, it has also banned people from using and carrying e-cigarettes—a battery-powered, tobacco-free nicotine delivery system with no known health risks. The only nicotine products permitted on site are those made by the pharmaceutical industry, which just so happens to give lavish donations to anti-smoking groups around the world, including our very own Action on Smoking and Health.
The other nine University of California campuses have promised to follow San Francisco’s lead by 2014 and, if history is any guide, it is only a matter of time before the UK does likewise. What is remarkable about this new phase of the anti-smoking crusade is how effortlessly it has shifted from a position of “we must protect nonsmokers” to “this is for your own good”. Say what you like about smoking ban in Britain, but at least campaigners made an attempt to appeal to John Stuart Mill’s harm principle. No longer. None of the universities have pretended that smoking outdoors is a threat to passers-by, just as the British Medical Association does not pretend that smoking alone in one’s own car has implications for nonsmokers, but all they demanded a ban all the same.
Velvet glove, meet iron fist. Trampling on property rights; paternalism run riot; the tyranny of the majority—why would libertarians not be interested in this?
(Hat tip to Dr Michael Siegel, who wages a lonely war against cant and junk science from within the the anti-smoking movement)
Laffer curve sighted in Ireland
Earlier this year, Ireland’s Office of Revenue Commissioners made a shock discovery, albeit one which sounds slightly dull when put in the language of economics. They found that the price elasticity of cigarettes in Ireland is -3.6, which is to say that a 10% increase in price reduces sales by 36%. This came as a surprise because cigarettes—being notoriously addictive—are usually thought to have a consumption elasticity of less than -1.0, whereas a price elasticity of -3.6 implies that smokers are more price sensitive than people who buy jewellery, DVDs and toothpicks. This struck them as rather counterintuitive, to say the least.
Something was clearly up, and what had been going up was smuggling. Since 2002, the price of cigarettes has risen by 40% in real terms to 8.55 euros a pack and the black market has swollen accordingly. The -3.6 price elasticity figure only took into account legal sales, which have indeed declined significantly. The number of people smoking, however, has not. Smuggled snouts and privately imported baccy have made up the difference.
This is all as you might expect. The thin blue line of customs and excise officers is easily breached once prices in one part of Europe leap far ahead of prices elsewhere. Britain has had a similar experience, with more than half of all rolling tobacco being sold on the black market. None of this comes as a surprise to anyone, except possibly Deborah Arnott of the anti-smoking pressure group Action on Smoking and Health, who wrote in The Guardian in February that disparities in tobacco duty do not lead to smuggling and called for Britain to hike its ciggie taxes still higher.
My reason for mentioning this is not to point out the unintended consequences of sin taxes, but to report a rare sighting of a Laffer curve in a government document. While those on the left continue to debate its existence, Ireland’s Revenue Commissioners are taking the Laffer curve more seriously. They are candid enough to note that “cigarettes remain a sizeable source of exchequer funding. While it may be desirable from a public health perspective to abolish smoking, the €1bn in excise revenue from tobacco would be a significant loss from the fiscal perspective.” As such, they would like to maximise tax revenue and Arthur Laffer might have the answer:
Laffer suggests there may be an optimum tax rate that maximises tax revenue (the peak of the Laffer curve), moving either direction (higher or lower taxes) from that peak will lower revenue.
It seems likely that a Laffer type effect exists in the cigarette market in Ireland and the current level of taxation may be beyond the optimum. Therefore higher tax rates (higher prices) will lead to lower tax revenue.
They even provided a graph which shows a classic Laffer curve:
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There are plenty of arguments for and against high cigarette taxes. Some say that the government has a moral obligation to deter unhealthy pursuits while others think it is morally objectionable to exploit inelastic behaviour, ie. addiction. Leaving the ethical debate to one side, it cannot be denied that governments do receive significant sums of money from tobacco taxes and have done for many years. As Ireland’s customs wonks have now realised, this golden goose has reached the limit of how many eggs it can lay. Smokers, like drinkers, traditionally take a hit when economies tank, but governments in the highest taxing nations—including the UK—may have to start taking Arthur Laffer more seriously if they want to protect their income.